Fulfillment Special Report: Just 1 Question
Target Marketing: Where do companies’ returns-management programs fail to meet customers’ expectations, and how can they fix those weaknesses?
Michael Smith, vice president, Retail Business Solutions at Newgistics Inc.: Traditionally, product returns have been viewed as a “necessary cost of doing business,” and returns management was an afterthought. Many marketers handle returns as individual transactions and fail to consider the entire “returns process,” which begins at the point of sale. In this context, product returns create two key business problems:
• First, returns are a hassle for customers, resulting in dissatisfaction, attrition and lost revenue.
• Second, returns are costly to process; it’s four times the cost of forward fulfillment. (The average cost for processing a returned package is $42.971.)
Direct retailers can employ many returns-management best practices to turn their returns into a profit center and a significant touch point for improving customer retention and loyalty.
Merchants should provide a hassle-free return process. Customers should have the convenience of prepaid return labels and [conveniently located] drop-off points. For increased ease, make return labels accessible within the [fulfilled] order and on demand—Web, print and e-mail—for replacement or appeasement scenarios.
Product returns should be a component in a marketer’s overall customer loyalty program. Personalize customer communications with select customer knowledge, such as for “first-time buyer” and “VIP buyer” customer segments.
Provide visibility of inbound returns to customer service representatives and operations, so they can effectively answer inquiries from customers, reducing multiple customer calls attempting to confirm the status of their packages and refunds.
Like the purchase process, the returns process has a significant impact on customer loyalty and retention. A positive returns experience drives repeat purchases, while a frustrating experience triggers unnecessary customer attrition. Consumers want to shop with confidence and return with ease.